Was it a restaurant or a technology company? As Ando ceases its operations and its tech becomes part of Uber Eats, we have our answer.
— Kristen Hawley
Turns out the logistics associated with restaurant delivery are challenging to even the most successful and forward-looking restaurant operators.
Uber Eats has acquired Ando, the once delivery-only restaurant by David Chang. The terms of the deal were not disclosed. Ando will cease all restaurant operations in New York, effective immediately, as its team and tech integrate with Uber Eats. An Uber Eats representative did not offer details of Ando’s technology or the integration.
“We’ve worked with Uber to power our delivery from the start, and we’re excited our team and technology will play a role in their vision of building the world’s leading food delivery service going forward,” reads an Ando blog post on the subject.
Ando, which opened for business in the spring of 2016, attracted former WD~50 sous chef JJ Basil as head of culinary and Andy Taylor, formerly of Pret a Manger and Hale’n’Hearty, as its CEO.
“I’m really proud of everything JJ, Andy, and the team have built over the past two years,” said Chang in a statement. “I’m excited that the Ando team’s restaurant industry expertise will make Uber Eats an even better partner to restaurants by helping them share their food, while growing their business.”
The Challenges of a Virtual Restaurant
Ando’s timeline reads like a history of logistical challenges facing the restaurant industry in an era of booming online delivery. It launched as a delivery-only lunch restaurant in the spring of 2016, and announced a $7 million round of funding that November. (Angel investors in the round led by Forerunner reportedly included Aziz Ansari and Jimmy Kimmel, too.) The investments signaled Ando was operating more like a tech startup, and less like a restaurant.
In February 2017, amid logistical challenges, Taylor joined the company as CEO, shifting its focus to food, not technology. The company streamlined its menu, dropping dishes like fried chicken that didn’t travel well. Instead, it built a menu of customizable sandwiches and other delivery-ready staples. Last September, Ando ditched its delivery-only label and opened a storefront on 14th Street near New York’s Union Square. The move was meant to attract an audience beyond the online delivery set.
In July, TechCrunch gave a bit more insight into Ando’s technology, which is likely what made it attractive to Uber Eats. Ando used over 20 variables to determine delivery time of any given item, from cook time to rain and wind speed.
Today’s move isn’t necessarily a surprise to those who follow the venture capital model of operation. In fact, in the 2016 New York Times article detailing Ando’s venture funding quotes Forerunner Ventures General Partner, Kirsten Green, saying, “Hopefully we’ll make a big successful business, and then we’ll look for a liquidity event.”
Restaurants’ Pain Points Are Delivery Companies’ Strengths
On the other hand, the logistics and technology that often challenge restaurants trying to do a big delivery business is Uber Eats’ bread and butter. The company was born of logistics, and as its food delivery business has grown by leaps and bounds over two years to include 80,000 restaurants worldwide.
But delivery logistics aren’t the only thing that makes a company like Uber Eats attractive to restaurants. Uber Eats released a revamped restaurant-facing dashboard last summer, offering analytics, including dish popularity, performance metrics, and even suggestions about new menu items to add based on local consumer demand. It has worked with several restaurants to develop second, delivery-only concepts that can be run out of the same kitchen (for example, a pizzeria that added a fried chicken concept to cash in on local demand for fried chicken).
While this deal does result in Ando’s closure, the acquisition is a validation of the team’s technology.
“We are committed to investing in technology that helps consumers, delivery and restaurant partners alike,” said Jason Droege, vice president of Uber Everything. “Ando’s insights will help our restaurant technology team as we work with our restaurant partners to grow their business.”
Ando wasn’t Chang’s first foray into the delivery-only business. He was an investor and advisor in Maple, the New York-based delivery service that handled both the food and its delivery. Maple closed in May of 2017, similarly sold to a delivery business, London-based Deliveroo.
Meanwhile, Chang’s Momofuku empire has shown no signs of slowing. His first Los Angeles restaurant, Majordomo, will open in the next few weeks. And just last week, Netflix announced a new series, “Ugly Delicious,” featuring Chang and a rotating cast of food and comedy all-stars, like René Redzepi, Ruth Reichl, Nick Kroll, and Ali Wong, debuting on February 23.